This Game is Not About One Person

It is very easy to sensationalize the Bill Ackman/Valeant saga. But, in reality, the entire healthcare sector, using the XLV ETF as a proxy, had been working through an abnormally-steep weekly chart uptrend (below) for years on end before finally cracking in August. 

When those steep uptrends crack it denotes a change in market tone which naturally sees the bad news, or monsters hiding under the bed, start to materialize. Thus, the recent sell-off in healthcare should not be attributed as much to Ackman as most financial news media would have you believe. 

Looking at the forest for the trees, with today's rotation back into healthcare there is also the issue of whether XLV may resume its uptrend now that it has taken a few months to correct.

Observing the XLV weekly, I would look for the $75 level above represent likely initial overhead supply if we make it up there, before assuming a new uptrend is imminent.